The Arrow Impossibility Theorem Explains

question 164

Multiple Choice

The Arrow impossibility theorem explains

• A)why there is no system of voting that will consistently represent the underlying preferences of voters.
• B)why government regulation of private markets will always result in a reduction in economic efficiency in these markets.
• C)why voters are always rationally ignorant.
• D)why it is not possible to provide the economically efficient amount of any public good.

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Definitions:

Opportunity Cost

The cost of the next best alternative foregone as the result of making a decision.

Depreciation

The reduction in the value of an asset over time, often due to wear and tear or obsolescence.

Implicit Cost

The opportunity cost equal to what a firm must give up or forgo in order to use resources in its own operations, not directly paid in money.

Part-Time Employees

Part-time employees are workers who are employed for fewer hours than the standard full-time work schedule, often without the same benefits as full-time employees.